I’m not a bankruptcy lawyer or a labor lawyer, so I don’t know.
In bankruptcy, a company is seeking protection from creditors because it is “insolvent.” ‘Insolvent” generally means that a company is ubable, or is about to become unable, to pay its creditors in the ordinary course of business.
A bankrupt company’s contract is just a competing claim in a large pool with other creditors. Some classes of creditors have priority over others. Existing contracts are legally enforceable and must be honored, however, bankruptcy judges do have authority to modify contracts and other debts in a bankruptcy case. The rational is fairness and protection of other creditors according to their priorities.
We have often seen Airlines file for Chapter 11 bankruptcy and use it to modify or “cram down” its debts, including obligations under labor contracts while remaining in business. Shipping companies have probably done the same thing.
Can a union file for bankruptcy? I do not know if an “insolvent” union can file for bankruptcy, but I assume it can. If so, I have no doubt that there are special rules for a union bankruptcy. Can a union operate in Chapter 11 bankruptcy or something like it? I don’t know.
In order for a union to file for bankruptcy (if it can), it would need to be “insolvent.” What does “insolvent” mean in the context of a collective bargaining agreement to crew ships. I have no idea,
One thing I am sure of, if a group of solvent well established unions with existing collective bargaining agreement merge to form a new super union, then it sure as hell had better be solvent !
I don’t see how a union could claim to be insolvent and use bankruptcy law to attempt to modify low wage contracts to increase member wages. That makes no sense at all.